On August 31, 2014, Claresview Company had a cash balance per its books of $26,474. The bank statement on that date showed a balance of $17,602. A comparison of the bank statement with the Cash account revealed the following:
1. The August 31 deposit of $17,127 was not included on the August bank statement.
2. The bank statement shows that Claresview received EFT deposits from customers on account totaling $2,256 in August. Claresview has not recorded any of these amounts.
3. Cheque #673 for $1,450 was outstanding on July 31. It did not clear the bank account in August. All of the cheques written in August have cleared the bank by August 31, except for cheque #710 for $2,504, and #712 for $2,600.
4. The bank statement showed on August 29 an NSF charge of $485 for a cheque issued by R. Dubai, a customer, in payment of their account. This amount included a $10 service charge by Claresview's bank.
5. Bank service charges of $25 were included on the August statement.
6. The bank recorded cheque #705 for $105 as $150. The cheque had been issued to pay for freight out on a sale. Claresview had correctly recorded the cheque.
Instructions
(a) Prepare a bank reconciliation at August 31.
(b) Prepare the necessary adjusting entries on August 31?